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The Indian stock market has entered the new year with a strong note. The benchmark indices ascended nearly 3% in the first week of the new year. Among various stocks, many experts expect the following top ten stocks to deliver strong returns over the next few weeks. 

1. Hindalco Industries Ltd: 507.50 INR +9.55 (1.92%)

Hindalco is the primary metals company of the Aditya Birla Group. Its stock has gained above 2% on January 12, 2022, after Novelis Inc’s – its wholly-owned subsidiary – announced to invest $365 million to build the recycling plant.

There is a healthy intermediate uptrend for the stock with consistent higher tops and bottoms during the entire previous year. There has been a recent correction, and the stock has thereafter bounced back. Breaking out on Friday, the stock recorded above-average volumes. 

Insights – Know Before You Invest
SectorAluminium
Market CapINR 114,043 Crores
20D Avg Volume7,109,305
20D Avg Delivery36.37%
Face Value1
Book Value Per Share296.13
Industry Price Earning (P/E) Ratio57.26
Price-to-Book (P/B) Ratio1.72
Dividend Yield0.59
PeersJSW Steel, Tata Steel, SAIL, NMDC

 

Company SWOT Analysis
StrengthsA growth stock selected based on CANSLIM investment criteria – fundamental and technical analysis.
WeaknessesDeclined ROE in the last two years
OpportunitiesBrokers upgraded recommendation in previous three months
ThreatsBoosting trend in non-core income

 

2. Oil and Natural Gas Corporation Ltd. (ONGC): 163.80 INR -1.15 (-0.70%)

With a sudden increase until October 2021, stock price documented a corrective phase within an uptrend. The volumes have been reasonable during the upward price move and low during corrections, which is a favorable sign. There has been some buying interest. The stock price has shown a breakout above its swing high on the 1-15-minutes chart. Experts are expecting the stock to rally in the near term. 

Insights
SectorOil Drilling And Exploration
Market CapINR 206,631 Crores
20D Avg Volume11,769,355
20D Avg Delivery43.02%
Face Value5
Book Value Per Share160.8
Industry Price Earning (P/E) Ratio16.68
Price-to-Book (P/B) Ratio1.03

 

SWOT Analysis
StrengthsHigh trailing twelve months (TTM) Earnings Per Share (EPS) Growth
WeaknessesReturn on capital employed (RoCE) declined in the last two years, showing inefficient use of means to generate profits.
OpportunitiesThe current TTM P/E Ratio is less than the previous 3 Years P/E
ThreatsRising Trend in Non-Core Income
Face Value5
Book Value Per Share160.8
Industry Price Earning (P/E) Ratio16.68
Price-to-Book (P/B) Ratio1.03
Dividend Yield2.19
PeersReliance, Petronet LNG, Oil India, HOEC

 

3. Dr Lal Pathlabs : 3,766.55 INR +93.75 (2.55%)

The stock is fundamentally strong. The stock is presently trading at Rs. 3766. Investors should show a buying interest for Lal Path Labs stock in the short term because of a breakout above a declining trendline resistance of the consolidation. During the last month, it was observed that the volume action was good during an up move in prices, but corrections were not backed by higher volumes, which is a favorable sign. 

Insights
SectorPharmaceuticals
Mkt Cap (Rs. Cr.)INR 31,180 Crores
20D Avg Volume160,607
20D Avg Delivery60,070
Face Value10
Book Value Per Share148.33
Industry Price Earning (P/E) Ratio127.03
Price-to-Book (P/B) Ratio25.21
Dividend Yield0.54
PeersMetropolis, Apollo Hospital, Max Healthcare, Fortis Health

 

SWOT Analysis
StrengthsHigh Piotroski Score with strong financials
WeaknessesMutual Funds decreased their shareholding last quarter
OpportunitiesPositive Breakout First Resistance
ThreatsDegrowth in earnings in one fiscal quarter than the previous

 

Piotroski’s score is based on the three most important criteria – Leverage, Operating Efficiency, and Profitability. Nine criteria were used to determine the score that shows the strength of a firm’s financial position.

 

4. Ultratech Cement: 7,606.80 INR -51.90 (-0.68%)

The company declared the commissioning of Line II of Uttar Pradesh based Bara Grinding Unit. The line I was earlier commissioned in Jan 2020, with capacity utilisation of over 80%.

Backed by high volumes, the stock broke out of the recent trading range on new year’s eve. The intermediate technical setup looks buoyant with the stock trading above key moving averages, and the uptrend is set to continue. 

Insights
SectorCement-Major
Market CapINR 219,582 Crores
20D Avg Volume264,786
20D Avg Delivery48.71%
Face Value10
Book Value Per Share1530.5
Industry Price Earning (P/E) Ratio40.44
Price-to-Book (P/B) Ratio4.98
Dividend Yield0.49
PeersShree Cements, Dalmia Bharat, Ambuja Cements

 

SWOT Analysis
StrengthsImproved RoCE in previous two years- effective use of capital to generate profit
WeaknessesRising costs Year-over-Year (YoY) for long term projects
OpportunitiesBrokers upgraded recommendation in previous three months
ThreatsUpcoming results for Nifty500 with decreasing share price over the week

 

5. State Bank of India (SBI): 511.35 INR +1.10 (0.22%)

After a short-term correction, there is a double bottom formation on daily and weekly charts. Such a promising bullish candle indicates a strong possibility of a new uptrend. 

Insights
SectorPublic Banking Sector
Market CapINR 456,360 Crores
20D Avg Volume16,015,921
20D Avg Delivery34.14%
Face Value1
Book Value Per Share293.13
Industry Price Earning (P/E) Ratio21.27
Price-to-Book (P/B) Ratio1.75
Dividend Yield0.78
PeersBank of Baroda, Canara Bank, Indian Overseas Bank, PNB

 

SWOT Analysis
StrengthsIncreasing Net Cash Flow
WeaknessesHigh Debt
OpportunitiesThe current TTM PE Ratio is lower than in the past 3 Years
ThreatsIncreased NPA in Recent Results

 

6. Asian Paints: 3,456 INR -87.55 (-2.47%)

Recently, the stock gave breakouts of the ‘SAUCER’ price pattern on the weekly charts, and it has continuously been making lifetime highs since August 2020. It shows a solid positive undertone with a big bullish candle that is backed by strong volumes indicating a favorable trend.

Insights
SectorPaints & Varnishes
Market CapINR 331,522 Crores
20D Avg Volume799,696
20D Avg Delivery50.75%
Face Value1
Book Value Per Share137.92
Industry Price Earning (P/E) Ratio103.05
Price-to-Book (P/B) Ratio25.06
Dividend Yield0.52
PeersBerger Paints, Kansai Nerolac, Indigo Paints, Akzo Nobel

 

SWOT Analysis
StrengthsLow Debt
WeaknessesNegative Breakdown Third Support
OpportunitiesBrokers upgraded recommendation in previous three months
ThreatsRecent Broker Downgrades in Target Price

 

7. Hindustan Unilever (HUL): 2416.00 INR +3.10 (0.13%)

HUL has raised its product prices – soaps and detergents – by 3-20%. Net Sales are expected to rise by 7.3% YoY (up 0.2% QoQ) to Rs. 13,046 crore. The company has sustained a good dividend track report for five years. The company has announced an equity dividend of 3100% (Rs. 31 per share) for the year ending March 2021 – a dividend yield of 1.29% at the current share price of Rs. 2408.60. Earnings before interest, tax, depreciation, and amortisation (EBITDA) are likely to rise by 6.2% YoY.

There is a higher bottom formation on daily charts for the stock, indicating a new uptrend.

Insights
SectorPersonal Care
Market CapINR 567,238 Crores
20D Avg Volume1,274,903
20D Avg Delivery62.25%
Face Value1
Book Value Per Share202.99
Industry Price Earning (P/E) Ratio66.59
Price-to-Book (P/B) Ratio11.9
Dividend Yield1.28
PeersDabur India, Godrej Consumer, Marico, P&G

 

SWOT Analysis
StrengthsNo Debt
WeaknessesMutual Funds reduced their shareholding last quarter
OpportunitiesBrokers upgraded recommendation in previous three months
ThreatsRecent Broker Downgrades in Target Price

 

8. HCL Tech: 1334 INR -17.90 (-1.32%)

After a range breakout formation on daily charts, the stock has maintained significantly higher high-low formations and charts indicate a strong possibility of a further uptrend from current levels. For Q3 2021, the company reported a total income of Rs 20895 Crores, an increase of 2.81% from last quarter. The net profit after tax was documented at Rs 3263.00 crores in the latest quarter. Promoters held a 60.33% stake in the company as of Q3 2021, DIIs owned 12.47%, and FIIs  22.3%. Backed by volumes and favorable technical indicators, the stock confirms the bullishness. 

Insights
SectorComputers-Software
Market CapINR 3,62,070 Crores
20D Avg Volume4,325,797
20D Avg Delivery49.84%
Face Value2
Book Value Per Share221.4
Industry Price Earning (P/E) Ratio44.3
Price-to-Book (P/B) Ratio6.03
Dividend Yield0.75
PeersTCS, Infosys, Wipro, Tech Mahindra

 

SWOT Analysis
StrengthsIncreasing Net Cash Flow
Weaknesses-ve Breakdown First Support
OpportunitiesBrokers upgraded recommendation in previous three months
Threats

 

9. Rain Industries Limited (RAIN): 253 INR +12.30 (5.10%)

RAIN is a foremost vertically integrated producer of carbon and advanced materials products with manufacturing facilities in eight countries across three continents. Lately, the stock gave range breakouts above the previous 8-week highs accompanied by supportive volumes. 

Insights
SectorCement – Major
Market CapINR 8,523 Crores
20D Avg Volume3,265,846
20D Avg Delivery24.30%
Face Value2
Book Value Per Share169.62
Industry Price Earning (P/E) Ratio40.44
Price-to-Book (P/B) Ratio1.5
Dividend Yield0.39
PeersPhillips Carbon Black Limited (PCBL), Goa Carbon

 

SWOT Analysis
StrengthsHigh TTM EPS Growth
Weaknesses
OpportunitiesPositive shifts in share price with upcoming results
ThreatsThe increasing trend in non-core income

 

10. Balaji Amines Ltd: 3,686.70 INR +1.70 (-0.05%) 

Balaji Amines documented improved earnings, revenues, and profit margins. Revenue for FY 2021 is increased by 40% from FY 2020. Net income was increased by 127% from FY 2020. The profit margin has moved up by 18%.

Insights
SectorChemicals
Market CapINR 11,945 Crores
20D Avg Volume99,832
20D Avg Delivery32.15%
Face Value2
Book Value Per Share280.83
Industry Price Earning (P/E) Ratio51.75
Price-to-Book (P/B) Ratio13.13
Dividend Yield0.11
PeersAarti Ind, Atul, Gujarat Fluoro, Clean Science

 

SWOT Analysis
StrengthsHigh Piotroski Score with strong financials
WeaknessesIncreasing costs YoY for long term projects
OpportunitiesBrokers upgraded recommendation
ThreatsRising trend in non-core income

 

Finally, timing the entry points into stock will also matter the most along with the plan to exit it over the next few weeks. The markets might show signs of volatility owing to various macro-economic factors like policy announcements in the U.S and India, but good stocks will eventually hold up.

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